<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM 10-Q
(Mark One)
/X/ Quarterly report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 - For the quarterly period ended May 31, 1997.
/ / Transition report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 - For the transition period from _______________ to
_______________.
Commission File No. 0-19972
BRAUN'S FASHIONS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 06 - 1195422
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
2400 XENIUM LANE NORTH
PLYMOUTH, MINNESOTA 55441
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
TELEPHONE NUMBER: (612) 551-5000
----------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. YES X NO
----- -----
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
YES X NO
----- -----
As of July 1, 1997 -- 4,444,456 shares of Common Stock were outstanding.
The manually signed copy of this report contains 14 pages.
<PAGE>
BRAUN'S FASHIONS CORPORATION
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
Item 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS:
Consolidated Condensed Balance Sheet --
As of May 31, 1997 and March 1, 1997. . . . . . . . . . . . .3
Consolidated Condensed Statement of Operations --
For the Quarter Ended May 31, 1997 and June 1, 1996 . . . . .4
Consolidated Condensed Statement of Cash Flows --
For the Quarter Ended May 31, 1997 and June 1, 1996 . . . . .5
Notes to Consolidated Condensed Financial Statements. . . . .6
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . .6
PART II. OTHER INFORMATION
Item 5. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . .12
Item 6. EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . 12
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . .13
2
<PAGE>
PART I. FINANCIAL INFORMATION
BRAUN'S FASHIONS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEET
(Unaudited)
ASSETS MAY 31, MARCH 1,
1997 1997
------------ ------------
Current assets --
- Cash and cash equivalents $ 9,756,586 $ 10,913,716
- Accounts receivable, net of allowance
for doubtful accounts 455,205 532,331
- Merchandise inventory 10,616,724 9,253,896
- Income tax receivable 856,422 870,498
- Prepaid expenses 254,610 169,668
- Current deferred tax asset 513,954 799,952
------------ ------------
TOTAL CURRENT ASSETS: 22,453,501 22,540,061
Equipment and improvements, net 10,769,771 10,785,297
Other assets --
- Long-term deferred tax asset 1,198,151 1,198,151
- Other 64,462 113,630
------------ ------------
TOTAL OTHER ASSETS: 1,262,613 1,311,781
------------ ------------
TOTAL ASSETS: $ 34,485,885 $ 34,637,139
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities --
- Accounts payable $ 2,522,650 $ 2,433,652
- Accrued liabilities 3,671,739 4,451,843
- Current maturities of long term debt
and capital lease obligation 234,096 908,957
- Income taxes payable 302,552 --
------------ ------------
TOTAL CURRENT LIABILITIES: 6,731,037 7,794,452
Long-term liabilities --
- Long-term debt 10,260,031 10,373,662
- Accrued rent obligation 961,778 896,253
------------ ------------
TOTAL LONG-TERM LIABILITIES: 11,221,809 11,269,915
Stockholders' equity --
- Preferred stock-$0.01 par value,
1,000,000 shares authorized; none
outstanding
- Common stock-$0.01 par value,
9,000,000 shares authorized;
4,432,588 shares issued and
outstanding at May 31, 1997 and
March 1, 1997 44,326 44,326
- Additional paid-in capital 27,604,043 27,604,043
- Accumulated deficit (11,115,330) (12,075,597)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY: 16,533,039 15,572,772
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY: $ 34,485,885 $ 34,637,139
------------ ------------
------------ ------------
- --------------------------------------------------------------------------------
See accompanying notes to consolidated condensed financial statements.
3
<PAGE>
BRAUN'S FASHIONS CORPORATION
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(Unaudited)
QUARTER ENDED
----------------------------
MAY 31, 1997 JUNE 1, 1996
------------ ------------
Net sales $ 21,841,691 $ 21,504,169
Merchandise, buying and occupancy 14,182,902 14,798,532
------------ ------------
Gross profit 7,658,789 6,705,637
Selling, general and administrative expenses 5,472,334 5,936,215
Depreciation and amortization 606,043 762,541
------------ ------------
Operating income 1,580,412 6,881
Other expense
- Interest, net 200,498 359,063
------------ ------------
Income (loss) before income taxes
and extraordinary gain 1,379,914 (352,182)
Income tax provision (benefit) 524,367 (133,829)
------------ ------------
Net income (loss) before extraordinary gain 855,547 (218,353)
Extraordinary gain 104,720 --
------------ ------------
Net income (loss) $ 960,267 $ (218,353)
------------ ------------
------------ ------------
Earnings per share:
Net income (loss) before extraordinary gain $ 0.18 $ (0.06)
Extraordinary gain 0.02 --
------------ ------------
Net income (loss) $ 0.20 $ (0.06)
------------ ------------
------------ ------------
Weighted average number of shares
of common stock and common stock
equivalents outstanding 4,776,700 3,793,312
------------ ------------
------------ ------------
- --------------------------------------------------------------------------------
See accompanying notes to consolidated condensed financial statements.
4
<PAGE>
BRAUN'S FASHIONS CORPORATION
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
QUARTER ENDED
----------------------------
MAY 31, 1997 JUNE 1, 1996
------------ ------------
Cash flows from operating activities
- Net income (loss) $ 960,267 $ (218,353)
Adjustments to reconcile net income to
net cash provided by (used in) operating
activities:
- Depreciation and amortization 606,043 762,541
- Amortization of deferred financing
costs -- 22,800
- Increase in accrued rent obligation 65,525 14,364
- Extraordinary gain from early
extinguishment of debt (168,903) --
- (Gain) loss on disposals of property
and equipment, net (5,595) --
- (Increase) decrease in deferred tax
asset 285,998 --
Changes in operating assets and liabilities:
- (Increase) decrease in merchandise
inventory, prepaid expenses, receivables
and other (1,307,400) (1,081,065)
- Increase (decrease) in accounts payable,
accrued liabilities and income taxes
payable (388,554) (1,336,386)
----------- -----------
Net cash provided by (used in)
operating activities 47,381 (1,836,099)
Cash flows from investing activities --
- Purchase of equipment and improvements (599,147) (389,376)
- Proceeds from sale of fixtures and
equipment 14,225 --
----------- -----------
Net cash used in investing activities (584,922) (389,376)
Cash flows from financing activities --
- Redemption of 12% senior notes (640,000) --
- Principal payments on long-term debt (55,483) (52,745)
- Net borrowings from revolving line of
credit -- 2,200,000
- Interest added to principal 75,894 --
----------- -----------
Net cash generated (used) by
financing activities (619,589) 2,147,255
Net decrease in cash and cash equivalents (1,157,130) (78,220)
Cash and cash equivalents at beginning of year 10,913,716 1,543,131
----------- -----------
Cash and cash equivalents at end of period $ 9,756,586 $ 1,464,911
----------- -----------
----------- -----------
- -------------------------------------------------------------------------------
See accompanying notes to consolidated condensed financial statements.
5
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS:
1. BASIS OF PRESENTATION
The financial statements included in this Form 10-Q have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed, or omitted, pursuant to such rules and regulations. These
financial statements should be read in conjunction with the financial
statements and related notes included in the Company's Annual Report on
Form 10-K for the fiscal year ended March 1, 1997.
The results of operations for the interim periods shown in this report are
not necessarily indicative of results to be expected for the fiscal year.
In the opinion of management, the information contained herein reflects all
adjustments necessary to make the results of operations for the interim
periods a fair statement of such operations. All such adjustments are of a
normal recurring nature.
2. NOTE REDEMPTION
In April 1997, Braun's Fashions Corporation (the "Company") purchased
$800,000 principal face amount of its 12% Senior Notes due 2005, (the "New
Notes") at a 20% discount from par. This resulted in a gain of $104,720,
net of tax, for the quarter. This purchase will satisfy the Company's
total January 1, 1998 redemption requirement and a portion of its January
1, 1999 requirement as well. The remaining scheduled principal payments,
due January 1 of the following years, is as follows: 1999 - $679,595, 2000
- $803,902, 2001 - $875,752, 2002 - $958,207, 2003 - $1,040,074, 2004 -
$1,133,443 and 2005 - $6,031,476.
3. NEW ACCOUNTING STANDARD
In February 1997, the Financial Accounting Standards Board issued SFAS No.
128, "Earnings Per Share". SFAS No. 128 specifies new standards designed
to improve the earnings per share ("EPS") information provided in financial
statements by simplifying the existing computational guidelines, revising
the disclosure requirements and increasing the comparability of EPS data on
an international basis. Some of the changes made to simplify the EPS
computations include: (a) eliminating the presentation of primary EPS and
replacing it with basic EPS, with the principal difference being that the
common stock equivalents are not considered in computing basic EPS, (b)
eliminating the modified treasury stock method and the three percent
materiality provision and (c) revising the contingent share provisions and
the supplemental EPS data requirements. SFAS No. 128 also makes a number of
changes to existing disclosure requirements. SFAS No. 128 is effective for
financial statements issued for periods ending after December 15, 1997,
including interim periods. The Company has not yet determined the impact
of the implementation of SFAS No. 128.
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
GENERAL
Braun's Fashions Corporation (the "Company") is a Minneapolis-based regional
retailer of women's specialty apparel, which operates through its wholly-owned
subsidiary, Braun's Fashions, Inc. ("BFI"). As of July 1, 1997, the Company
operated a chain of 170 stores in 20 states in the Midwest and Pacific
Northwest. The Company's stores offer coordinated assortments of moderately
priced sportswear, sweaters, dresses and accessories.
6
<PAGE>
As a result of an extremely competitive environment and in response to the
deteriorating liquidity position brought on by losses at approximately 50 of its
store locations and to facilitate restructuring of its obligations, the Company
filed for protection from its creditors under Chapter 11 of the United States
Bankruptcy Code on July 2, 1996. The Company's plan of reorganization was
confirmed by the Bankruptcy Court on November 22, 1996 and became effective on
December 3, 1996.
As a result of the reorganization, the Company rejected 50 unprofitable store
leases; re-negotiated more favorable lease terms for an additional 46 stores;
negotiated a $10 million working capital line of credit with a new lender;
downsized the distribution center by 35,000 square feet; strengthened the
organization by hiring highly qualified individuals in the key areas of store
operations and merchandise planning and distribution, and eliminated corporate
and field staff associated with the discontinuance of the junior division (Gigi
stores) and the reduced number of stores.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, certain items from
the Company's operating statement data expressed as a percentage of net sales.
QUARTER ENDED
-------------
MAY 31, 1997 JUNE 1, 1996
------------ ------------
Net sales 100.0% 100.0%
Merchandise, buying and occupancy 64.9 68.8
-------- --------
Gross profit 35.1 31.2
Selling, general and administrative 25.1 27.6
Depreciation and amortization 2.8 3.6
-------- --------
Operating income 7.2 0.0
Interest, net 0.9 1.6
-------- --------
Income (loss) before income taxes
and extraordinary gain 6.3 (1.6)
Income tax provision (benefit) 2.4 (0.6)
-------- --------
Income (loss) before extraordinary gain 3.9 (1.0)
Extraordinary gain 0.5 --
-------- --------
Net income (loss) 4.4% (1.0)%
-------- --------
-------- --------
7
<PAGE>
QUARTER ENDED MAY 31, 1997 COMPARED TO QUARTER ENDED JUNE 1, 1996.
NET SALES. Net sales for the quarter ended May 31, 1997, were $21.8 million, an
increase of 2% from $21.5 million in the quarter ended June 1, 1996. The
increase in sales was due to a 19% increase in same-store sales offset by
operating fewer stores in the current year's quarter. The Company closed
approximately 50 underperforming stores during its Chapter 11 bankruptcy
reorganization which was successfully completed on December 3, 1996. During the
first quarter of fiscal 1998, the Company opened 5 stores and closed 5 stores as
leases expired.
GROSS PROFIT. Gross profit, which is net sales less cost of merchandise and
buying and occupancy expenses, was $7.7 million or 35.1% of net sales during the
first quarter of fiscal 1998 compared to $6.7 million or 31.2% of net sales
during the same period in fiscal 1997. The percentage increase in gross profit
was primarily due to closing unprofitable stores whose gross margins were lower
than the continuing stores and lower occupancy costs as a percent of net sales
in the continuing stores.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses for the first quarter of fiscal 1998 decreased to $5.5
million or 25.1% of net sales from $5.9 million or 27.6% of net sales in the
first quarter of fiscal 1997. This decrease primarily resulted from the Company
operating fewer stores in the current quarter compared to the previous year.
OPERATING INCOME. Operating income for the quarter ended May 31, 1997, was $1.6
million or 7.2% of net sales as compared to operating income of $7,000 or 0.0%
of net sales in the quarter ended June 1, 1996.
INTEREST, NET. Net interest decreased by $0.2 million from $0.4 million in the
first quarter of fiscal 1997 to $0.2 million in the current year's quarter.
This decrease was due to the Company's improved cash flow which resulted in no
advances on the line of credit during the quarter and increased income from
investments.
INCOME TAXES. Income tax expense in the first quarter of fiscal 1998 was $0.5
million compared to an income tax benefit of $0.1 million in the first quarter
of fiscal 1997.
EXTRAORDINARY GAIN. In April 1997, the Company purchased $800,000 principal
face amount of its New Notes at a 20% discount from par. This resulted in the
recognition of an extraordinary gain on the early extinguishment of debt, net of
tax, of $0.1 million or 0.5% of net sales.
NET INCOME (LOSS). As a result of the foregoing factors, net income for the
quarter ended May 31, 1997, was $1.0 million or 4.4% of net sales compared to a
loss of $0.2 million or 1.0% of net sales for the quarter ended June 1, 1996.
8
<PAGE>
PERFORMANCE OF CONTINUING STORES.
The closing of stores in connection with the Company's Chapter 11 bankruptcy
filing in fiscal 1997 has enabled management to concentrate its efforts on the
continuing stores that the Company believes provide the greatest potential for
ongoing profitability. The following table sets forth the results of operations
for these continuing stores for the periods indicated.
<TABLE>
<CAPTION>
CONTINUING STORES (DOLLARS IN THOUSANDS)
------------------------------------------------------------
THREE MONTHS ENDED THREE MONTHS ENDED
MAY 31, 1997 JUNE 1, 1996
-------------------------- -------------------------
<S> <C> <C> <C> <C>
Net sales $ 21,084 100.0% $ 17,780 100.0%
Merchandise, buying and occupancy 13,686 64.9% 11,765 66.2%
---------- ----- --------- -----
Gross profit 7,398 35.1% 6,015 33.8%
Selling, general and administrative 5,291 25.1% 4,896 27.6%
Depreciation and amortization 596 2.8% 577 3.2%
---------- ----- --------- -----
Operating income $ 1,511 7.2% $ 542 3.0%
---------- ----- --------- -----
---------- ----- --------- -----
</TABLE>
For the three months ended May 31, 1997, operating income in the 167 continuing
stores increased $1.0 million from the same period in the prior year, continuing
on the trend established in the third and fourth quarters of fiscal 1997. The
increase in operating income was primarily due to a 19% same store sales
increase, improved gross margins resulting primarily from lower occupancy costs
and reductions in selling, general and administrative expenses due to closing
approximately 50 unprofitable stores during the Company's Chapter 11 bankruptcy
proceedings.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal needs for liquidity are to finance the purchase of
merchandise inventories and other working capital requirements. Merchandise
purchases vary on a seasonal basis, peaking in the fall. As a result, the
Company's cash requirements historically reach their peak in October and
November. Conversely, cash balances reach their peak in January, after the
holiday season is completed.
Net cash generated by operating activities totaled $47,000 for the first three
months of fiscal 1998 as compared to a net usage of $1.8 million for the same
time period in the prior year. The improvement in cash generated by operating
activities resulted from increased same store sales of 19% and reductions in
selling, general and administrative expenses due to closing approximately 50
unprofitable stores. Cash was used to finance $599,000 of capital expenditures
for the opening of 5 stores and other miscellaneous capital expenditures.
During the remainder of the fiscal year the Company expects to spend up to an
additional $4.0 million on capital expenditures opening approximately 10
additional new stores, remodeling stores and completing other miscellaneous
capital additions. Management expects its cash on hand combined with cash flow
from operations to be sufficient to meet its capital expenditure and working
capital requirements and its other needs for liquidity during the year.
9
<PAGE>
In December 1996, the Company entered into a borrowing agreement with Norwest
Bank Minnesota, National Association (the "Norwest Revolver") expiring April 1,
1999. The Norwest Revolver provides the Company with revolving credit loans and
letters of credit up to $10 million, subject to a borrowing base formula.
Loans under the Norwest Revolver bear interest at Norwest's base rate plus 3/4%.
The interest is payable monthly in arrears. After the first quarter of fiscal
1998, the Norwest Revolver provides for a potential decrease in the interest
rate, depending on the financial performance of the Company (as described in the
Norwest Revolver). The Norwest Revolver carries commitment fees of 1/4% of the
difference between $5 million and the average amount outstanding under the
facility (including letters of credit). If the average amount outstanding under
the facility (including letters of credit) is between $5 million and $7.5
million, the commitment fee shall be based on the difference between $7.5
million and the average amount outstanding under the facility (including letters
of credit) and if the average amount outstanding (including letters of credit)
is in excess of $7.5 million, the commitment fee is on the difference between
$10 million and the average amount outstanding under the facility (including
letters of credit). This facility is secured by substantially all of the
Company's assets. The borrowing base at July 1, 1997, was $6.0 million. As of
July 1, 1997, the Company had no borrowings and outstanding letters of credit in
the amount of $2.3 million under the Norwest Revolver. Accordingly, the
availability of revolving credit loans under the Norwest Revolver was $3.7
million at that date.
In December 1996, the Company issued $10,300,200 of public debt in the form of
12% Senior Notes (the "New Notes") due January, 2005. The New Notes were
issued, pursuant to an Indenture dated as of December 2, 1996, to (i) the
holders of the 9% Senior Notes due January 2001 where each holder received, for
each $1,000 principal face amount, (a) 48 shares of common stock in BFC and (b)
New Notes in original principal amount of $800 and (ii) the Company's
prepetition banks who received a total of (a) 138,284 shares of common stock in
BFC and (b) $2,313,000 in original principal face amount of the New Notes.
The principal amount of the New Notes bears interest at the rate of 12% per
annum. Interest at the rate of 9% per annum on the outstanding principal amount
is to be paid monthly on the last day of each calendar month until all amounts
due and owing on the New Notes and under the Indenture have been paid in full.
Interest at the rate of 3% per annum on the outstanding principal amount shall
accrue monthly and shall, upon accrual, be treated as principal for all
purposes, including without limitation, the calculation of all interest payments
due thereafter, and shall be payable in full on January 1, 2005.
The New Notes are general unsecured senior obligations of the Company. The
Indenture for the New Notes contains certain covenants which, among other
things, limit the ability of the Compnay to incur liens, incur additional
indebtedness, and restrict the Company's ability to declare dividends.
In April 1997, the Company purchased $800,000 principal face amount of its New
Notes at a 20% discount from par. This purchase will satisfy the Company's
total January 1, 1998 redemption and a portion of its January 1, 1999 redemption
as well. The remaining scheduled principal payments, due January 1 of the
following years, is as follows: 1999 - $679,595, 2000 - $803,902, 2001 -
$875,752, 2002 - $958,207, 2003 - $1,040,074, 2004 - $1,133,443 and 2005 -
$6,031,476.
The Company is unaware of any environmental liability that would have a material
adverse effect on the financial position or the results of operations of the
Company.
10
<PAGE>
FORWARD LOOKING INFORMATION
Information contained in this Form 10-Q contains "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995,
which can be identified by the use of forward-looking terminology such as "may",
"will", "expect", "plan", "anticipate", "estimate" or "continue" or the negative
thereof or other variations thereon or comparable terminology. There are
certain important factors that could cause results to differ materially from
those anticipated by some of these forward-looking statements. Investors are
cautioned that all forward-looking statements involve risks and uncertainty.
The factors, among others, that could cause actual results to differ materially
include: consumers' spending and debt levels; the Company's ability to execute
its business plan; the acceptance of the Company's merchandising strategies by
its target customers; the ability of the Company to anticipate marketing trends
and consumer needs; continuity of a relationship with or purchases from major
vendors, particularly those from whom the Company imports merchandise;
competitive pressures on sales and pricing; increases in other costs which
cannot be recovered through improved pricing of merchandise; and the adverse
effect of weather conditions from time to time on consumers' ability or desire
to purchase new clothing.
11
<PAGE>
PART II. OTHER INFORMATION
Item 5. Other Information
On July 2, 1997, the Company issued a press release announcing several
promotions. William J. Prange was promoted to President and Chief
Merchandising Officer. Prange has served as the Company's Senior Vice
President and General Merchandising Manager since April 1995 after joining
the Company as a Vice President in April 1994. Herbert D. Froemming was
promoted to Vice Chairman and Chief Administrative and Financial Officer.
Since June 1994, Froemming has been the Company's President and Chief
Operating Officer, and was Chief Financial Officer from January 1989 to May
1994. Ralph C. Neal was promoted to Senior Vice President of Operations.
Neal has been Vice President of Operations since September 1996. Joseph
Pennington was promoted to Senior Vice President of Merchandise Planning
and Distribution. He had been a Vice President in a similar capacity since
February 1997.
Item 6. Exhibits and reports on Form 8-K
(a) Exhibits
Exhibit 11 -- Statement Re: Computation of Per Share Earnings
Exhibit 27 -- Financial Data Schedules (submitted for SEC use only)
(b) Reports on Form 8-K
None
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: July 11, 1997
BRAUN'S FASHIONS CORPORATION
By /S/ HERBERT D. FROEMMING
-----------------------------------------
Herbert D. Froemming
Vice Chairman & Chief
Administrative & Financial Officer
Signing on behalf of the
registrant and as principal
financial officer.
<PAGE>
EXHIBIT 11
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
QUARTER ENDED
-----------------------------------
MAY 31, JUNE 1,
1997 1996
------------- -------------
<S> <C> <C>
PRIMARY:
Net income (loss) before extraordinary gain. . . . . . . . . . . . . . . . . $ 855,547 $ (218,353)
Extraordinary gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104,720 ---
------------- -------------
Net income (loss). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 960,267 $ (218,353)
------------- -------------
------------- -------------
Weighted average common shares outstanding . . . . . . . . . . . . . . . . . 4,432,588 3,793,312
Common stock equivalents: (stock options and warrants) . . . . . . . . . . . 344,112 ---
------------- -------------
Weighted average number of common shares
and common share equivalents outstanding . . . . . . . . . . . . . . . . . . 4,776,700 3,793,312
------------- -------------
------------- -------------
EARNINGS PER SHARE:
Net income (loss) before extraordinary gain. . . . . . . . . . . . . . . . . $ 0.18 $ (0.06)
Extraordinary gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.02 ---
------------- -------------
Net income (loss). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.20 $ (0.06)
------------- -------------
------------- -------------
</TABLE>
The Company's common stock has traded on the NASDAQ National Stock Market under
the symbol "BFCI" since March 31, 1992. Prior to that date there was no public
market for the Company's common stock.
Note: The calculation of fully diluted earnings per share results in the same
earnings per share shown above.
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S 10-Q FOR THE QUARTER ENDED MAY 31,1997 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-START> MAR-2-1997
<PERIOD-END> MAY-31-1997
<CASH> 9,756,586
<SECURITIES> 0
<RECEIVABLES> 455,205
<ALLOWANCES> 0
<INVENTORY> 10,616,724
<CURRENT-ASSETS> 22,453,501
<PP&E> 21,753,645
<DEPRECIATION> 10,983,874
<TOTAL-ASSETS> 34,485,885
<CURRENT-LIABILITIES> 6,731,037
<BONDS> 10,260,031
0
0
<COMMON> 44,326
<OTHER-SE> 16,488,713
<TOTAL-LIABILITY-AND-EQUITY> 34,485,885
<SALES> 21,841,691
<TOTAL-REVENUES> 21,841,691
<CGS> 14,182,902
<TOTAL-COSTS> 14,182,902
<OTHER-EXPENSES> 6,078,377
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 200,498
<INCOME-PRETAX> 1,379,914
<INCOME-TAX> 524,367
<INCOME-CONTINUING> 855,547
<DISCONTINUED> 0
<EXTRAORDINARY> 104,720
<CHANGES> 0
<NET-INCOME> 960,267
<EPS-PRIMARY> 0.20<F1>
<EPS-DILUTED> 0.20<F1>
<FN>
<F1>First quarter fiscal 1998 results include an extraordinary gain of $.02 per
share related to the April 1997 purchase at a discount from par of $800,000
principal face amount of 12% Senior Notes due 2005.
</FN>
</TABLE>
